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Bookkeeping

Bookkeepers manage all financial data for companies and have power due to their knowledge. Proper bookkeeping allows companies to track finances and make decisions. Small companies often outsource bookkeeping due to costs. Bookkeeping gives companies measures of performance and guidance for decisions, so maintaining proper records is important.

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19 views

Bookkeeping

Bookkeepers manage all financial data for companies and have power due to their knowledge. Proper bookkeeping allows companies to track finances and make decisions. Small companies often outsource bookkeeping due to costs. Bookkeeping gives companies measures of performance and guidance for decisions, so maintaining proper records is important.

Uploaded by

huko
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Bookkeeping

Bookkeepers are individuals that manage all the


financial data for companies. Under the general notion
that knowledge is power, bookkeepers to a certain
degree have a high level of power within a company
given their access and knowledge of all its financials.
With proper bookkeeping, companies are able to track
all information in the company’s books to help make
key decision, which include operating, investing, and
financing matters. Without bookkeepers, companies
would have no clue about their current financial
position and any transactions that occur within the
company. Just as much as bookkeeping is important to
the company’s internal users, accurate bookkeeping is
also crucial to external users: investors, financial
institutions, or the government who needs access to
reliable information to make better investment or
lending decisions. Simply put, our whole economy
relies on accurate and reliable bookkeeping for both
internal and external users.

Many small companies don’t actually hire full-time


accountants to work for them because the costs are
usually higher. Instead, small companies generally hire a
bookkeeper or outsource their bookkeeping duties to a
professional bookkeeping firm. An important thing to
note here is that many people who have ambitions on
starting a new business sometimes overlook the
importance of trivial stuff such as records of every
penny spent. Running a business, however, is a
marathon and not a sprint and to help achieve
longevity, bookkeeping is essential! Proper bookkeeping
and a proper financial trail give companies a reliable
measure of how well or how poor they are doing. It also
provides guidance on general strategic decisions and a
benchmark for profit goals. In short, bookkeeping, once
a business is up and running, is our best friend so
spending the extra time and money on maintaining
proper records is critical.

Accrual vs Cash Basis of Accounting


In order to properly implement bookkeeping,
companies need to first choose the accounting method
they will follow. Companies can choose between two
basic accounting methods: the cash basis of accounting
or the accrual basis of accounting. The difference
between these types of accounting is based on when
you, the company, actually record the sale (money
inflow) or purchase (money outflow) in the books.

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